Email ElizabethA 2-Minute Guide To Flood Insurance: Do You Need it?
Blog – A 2-Minute Guide to Flood Insurance: Do You Need it?
This is a timely blog by our lender Dan Tharp– JaCi Wallace. When I heard a powerful “bomb cyclone” storm was hitting Northern California last week, I instantly thought about my Flood insurance. For many, they assume their property is covered for any type of detrimental occurrence that can take place. However, not all homeowners in Sacramento know that home insurance policies don’t necessarily cover damage related to a flood, as the risks are too great. As a result, homeowners must purchase flood insurance through a private company.
Floods are one of the most common hazards in the US, costing billions of dollars in damage to properties every year. And more importantly, if you are in the process of shopping for a new home in Sacramento or anywhere in California for that matter, budgeting that monthly payment, it’s good to know if flood insurance will be required.
What Is Flood Insurance?
Flood insurance policies are typically made available to homeowners in flood-prone areas. The majority of insurance policies cover some form of water damage, from things like leaking faucets to bursting plumbing pipes. However, such policies don’t cover water damage due to flooding of rivers or sewers that cause water to ruin a home. Instead, specific flood protection is provided by the National Flood Insurance Program (NFIP), which is run by the Federal Emergency Management Agency (FEMA). Standard flood insurance policies cover “direct physical damage” to a property resulting from floods.
A separate policy must be purchased to protect the belongings inside the home or building. Homeowners can buy up to $250,000 in coverage for the home and $100,000 in coverage for possessions. Even renters are permitted to purchase flood insurance to cover their possessions.
How Does Flood Insurance Work?
Flood insurance isn’t sold by FEMA directly but rather is sold to customers through private insurance agencies. The government determines premium rates, and they remain consistent from one insurer to the next.
How much a homeowner pays for their specific flood insurance depends on a number of factors, including how prone the neighborhood is to floods and how much coverage a homeowner wants. Natomas, where my office sits, is in a flood zone and my clients are required to get flood insurance. The yearly premium on my last quote was $516 annually. I can direct you to some very qualified local experts in flood insurance if you need a quote.
Filing A Flood Insurance Claim
The claims process is like any other insurance claim. Once the claim is filed, the damage will be analyzed by an adjuster assigned by the insurance company. A “proof of loss” form will need to filled out and submitted to the insurer within 60 days of the flood occurrence.
Do You Need Flood Insurance?
It’s necessary to find out if you are eligible for flood insurance before buying it. For residents of a community to be eligible, the community needs to enforce floodplain statutes to lessen the chances of flood damage, after which FEMA ensures that such regulations are followed.
Only those who reside in a community that participates in NFIP can buy insurance – today, about 20,000 communities across the country participate in this program.
FEMA offers maps that outline what areas are at high risk for floods, and those at moderate-to-low risk. The law requires homeowners to have flood insurance if the properties are located in a high-risk zone and have a federally-backed mortgage. This is because properties in these high-risk areas have a 26 percent chance of suffering flood damage during the 30 years it would take to pay off a mortgage. If you are currently shopping for a home and are not sure if you are in a flood zone, just give us a call with the home address and we will find out for you.
Homeowners are not required to buy flood insurance if they reside in a moderate-to-low-risk zone, though it may be a good idea to purchase it anyway. Properties outside the high-risk areas make up over 20 percent of NFIP claims. Homeowners in these areas can purchase up to $200,000 in flood insurance.
The bottom line is, even if you don’t necessarily live in a high-risk zone, this doesn’t mean your home won’t ever get flooded. Many conditions can result in flood damage, including clogged drain systems, flash rainstorms, and damaged levees.
In Gratitude,
| Dan Tharp – Branch Manager – 916-257-1470 NMLS# 280913 | Company NMLS # 3274 Guild Mortgage |
Hanging Up To Take Another Phone Call
Hanging up to take another phone call is a blog post excerpts written on another site by our team that is relevant today. Enjoy ~~JaCi Wallace.
Generally, when I spot a call coming in on my cellphone, providing I have the phone within my sight because I wear Bluetooth most of the day, I often send a custom templated text message to the caller if I am not available to answer the call. The reason I would be unable to answer the call is most likely because I am already on a call. I generally don’t hang up and grab another call unless I’m about ready to hang up. Otherwise, I keep talking because my business at hand is essential.
But I have met agents who will hang up. So if I am expecting an important telephone call, like a person, I have a super hard time getting on the phone; for example, I will tell the person when I call that I might have to hang up if that particular person calls. Otherwise, all calls go to voice mail or receive a text message when I’m on the phone.
You can read more about this particular practice in our personal blog today at this link: A True Story About Setting Priorities for the Self Employed.
If you would like to buy or sell a home, please contact Weintraub & Wallace Realtors today with RE/MAX Gold, an International Real Estate company. You can reach us at 916-233-6759.
When selling a home and doing repairs are your pets safe?
When selling a home and doing repairs, are your pets safe? I often tell people who want to leave their indoor cats loose in the house during inspections and repairs that it is not a good idea. Sellers often look at me like are you kidding? They say, well, put comments into MLS stating to not let cats out. I say I could tattoo it on their forehead and I still can not guarantee the safety of your pets. Not everyone is cat-savvy or dog-savvy. When Realtors or inspectors are in your house their mind is busy on several aspects of doing their job. The safety of your animals may not be registering high on their priority list. Your cat radar is not ingrained always ingrained into other people’s heads.
One quick story will shatter your belief that your animals are safe in other people’s hands who are working on your house. A pet sitter friend was house-sitting for a couple and they were remodeling a bathroom so they could put the house on the market. The sheetrock worker was working on the bathroom. The pet sitter told the sheet rocker to watch out for the two cats as he was running to an appointment. When he returned he asked about the cats. The sheetrocker said the cat is fine and pointed to a cat curled up in a corner. The pet sitter said where is the other cat? The sheetrocker said, “What other cat! ”
The pet sitter put up posters everywhere and knocked on doors for days. The owners returned home obviously very upset about the missing cat. The bathroom was finished. Shortly after returning home they heard meow meow and guess what? The cat cries were coming from inside the bathroom walls! They tore open the sheetrock and, indeed the cat had been sheetrocked in the wall. So, when selling a home and doing repairs are your pets safe? You can decide for yourself, but, in my opinion, the answer is no. You can’t make this stuff up. Selling real estate for decades you see so many things out of the ordinary.
If you want to hire animal-savvy Realtors call Weintraub & Wallace Realtors. We have ideas and animal crates and cat condos that we will set up for you to help keep your animals safe. People get so upset about confining their animals. When you take your cat or dog to the vet and they have to stay there for treatment do you think they are running around loose? Nope, they are in crates. Why not teach your animals how to be confined and this could not only save their life, it can help them not to stress out during an overnight at the vet. Experienced animals who do not think confinement is horrible actually find it a nice place for naps. How do I know this? I have so many cats, yes I’m one of that crazy cat ladies. I also have a pack of several dogs some are rescues. I speak from a place of caring and safety for our four-legged friends.
If you want to sell or buy a home and have concerns about your pets call us. We have great resources and even cat condo enclosures we can loan you to help increase the safety of your animals. Full service means we are here to help you with so many things. We can be reached at 916-233-6759. Our RE/MAX Gold offices are in so many locations.
— JaCi Wallace
Is the Buyer Entitled to Know Why Her Offer Was Rejected?
Is the Buyer Entitled to Know Why Her Offer Was Rejected?
When I think about why a buyer and the buyer’s agent might want a Sacramento listing agent to answer why the buyer’s offer was rejected, it reminds me a little bit of the reasons a listing agent might wonder why a
particular seller didn’t list with her. I’m not immune from such a thing, and it has happened to me, although not very often, thank goodness. I’ll do an incredible job for a client, and when it comes time to sell again, they might
call some other agent to list, even though they gave me a glowing review at the time their escrow closed.
It’s not because I don’t stay in touch, because I do. I try to touch my clients at least a couple of times a year, and they see my name everywhere. But every once in a blue moon a former client will not call me when it’s time to
list a home. And it’s OK, actually. I don’t need to ask the reason because the reason has nothing to do with me. Some agents think they own people, and we don’t own anybody. People’s lives change and they run into agents wherever they go. Their reason for choosing an agent generally has nothing to do with the former agent they did not list with and its other reasons. The world doesn’t revolve around us listing agents.
I prefer to have 100% referral reciprocation but every so often a person will choose somebody else, and generally for a very innocent reason. I see some agents get angry when it happens to them, and it’s such self-defeatist
behavior.
Then, we come to why a buyer’s offer was rejected. Does the buyer have a right to know the reason? You can read more in one of my timeless blogs today about, Why Do Sellers Reject Offers?
If you would like to discuss your real estate objectives to buy or sell your home, please contact us. We can be reached at 916-233-6759. Weintraub & Wallace Realtors with RE/MAX Gold.
Elizabeth Weintraub & JaCi Wallace
7 Common Myths About Mortgages
7 Common myths about mortgages is a very insightful post written by our very own preferred lender, Dan Tharp. — JaCi Wallace.
In my almost two decades in mortgage lending, these common myths still come up often. For example, just yesterday, I was on a call with a first-time homebuyer who assumed they needed 20% down to get a conventional loan and thought his only option was an FHA mortgage, which he heard was not a good option in this current seller’s market. Thus he was going to wait a year or so to save money for his down payment. I am glad his agent told him to call me as we pre-approved him to purchase a new home today with only 3% down. So let’s take the next minute or so to clear up some of the most common mortgage myths and truths about buying a home.
#1 Myth: You Must Have 20% Down To Purchase A Home
Nope, you can buy a home with as little as 3% down, and some types of government-backed loans have 0% down payment requirements. This myth stems from mortgage lenders’ private mortgage insurance requirements or PMI, a kind of protection that pays your mortgage lender if you default on your mortgage loan. If you put less than 20% down, your lender will require you to pay monthly PMI. Keep in mind that if you put less money down, the more interest you will have to pay, in addition, to the monthly PMI. To get a real-world example, use Guilds Mortgage Calculator.
#2 Myth: Prequalification Is The Same As Preapproval
The difference between preapproval and prequalification is the level of verification your lender does before they issue you an estimate. If your lender’s approval letter is not worth the paper it’s written on; it has no value. Unfortunately, this is something Realtors and sellers know all too well. And in an extremely hot seller’s market, you need to make sure your offer, among many others, will stand out!
A good rule of thumb is to make sure you are preapproved before you begin shopping. Whereas a prequalification is a good start, it doesn’t carry much weight when it’s time to make your offer. We offer a Verified Approval at Guild Mortgage via our Home Buyer Express (HBE) to give your offer a competitive edge. Our HBE verifies your credit, income, and assets and shows the sellers that your finances are sound and you’re a serious buyer.
#3 Myth: Your Down Payment Covers Your Closing Costs
When purchasing a home, the standard rule is you can’t roll the closing costs (lender fees, title and escrow fees, appraisal, etc.) into your loan. In addition to closings costs, there are also some pre-paid items you need to pay for as well – these include pre-paid interest, property taxes, and homeowners insurance. It adds up, so you want to be clear with your lender and ask the question, “What is my TOTAL cash to close, not just my down payment?”
A Few Tips –
Instead of dolling your own funds out of pocket, you could ask your agent to negotiate a seller concession, where the seller pays for some or all of your costs. But beware, this is much harder in a hot seller’s market. Another method is to “buy up” the interest rate so your lender can pay for some or all of the closing costs. Remember, this means a higher interest rate and higher monthly payment, so be sure to walk through the numbers with your lender.
#4 Myth: You Can’t Pay Your Mortgage Off Early
Some lenders may include clauses called “prepayment penalties” inside the terms of your loan. This penalty is an agreement that penalizes you if you pay off your mortgage too early. I don’t see this very often now, but the myth still lingers, and another good reason to read the fine print and ask your loan officer. If you choose Guild Mortgage as your lender, you are free to pay off your loan as soon as you wish or make extra payments to the principal balance with no penalties.
#5 Myth: My Debt Ratio Is Based On My Net Paycheck
Your debt-to-income ratio (DTI) is a calculation that represents the percent of your gross monthly income that goes toward debt and recurring expenses. For example, let’s say you earn $6000 a month before taxes. And, your proposed new mortgage payment (with taxes and insurance) will be $1800, and you have another $200 a month in student loans and a $200 minimum due on your credit card. So, in this example, you would divide your total monthly debt of $2200 by your gross pre-tax income ($6000), which equals a DTI of 37%.
A good rule of thumb is to keep your ratio below 50%, which will improve your chances of getting your mortgage loan approved. Some programs allow you to exceed 50%, but the most crucial factor is your budget at the end of the day! Are you comfortable with that total monthly mortgage payment? Please read our article on DTI ratios to learn more about this critical factor and how to calculate yours.
#6 Myth: Bad Debt Will Ruin My Loan Approval
Most folks don’t have perfect credit, and it’s not uncommon to have a few blemishes on your credit report. And most of the time, unless the debt issues are excessive, you can get away with a few old collections and still have an underwriter approve your loan. It’s best not to make any assumptions. Have your full credit reviewed by a mortgage professional who can help you get your loan approved now. They can also put you on a track to improve your scores and get approved later.
#7 Myth: Once My Loan is Approved, I Can Buy Stuff
With a typical purchase escrow taking between 20 to 30 days, your lender will first conditionally approve your mortgage. You get that awesome call from your loan officer telling you the good news! Your loan is approved, and soon you will be closing on your new home. NOTE – This is not the moment to celebrate by buying new furniture or that car that will fit nicely in your new garage. Basically, anything you might pay for in installments. You think you are good as you put the bubbly on ice but don’t realize that your credit will be rechecked before closing. Any new purchases you have made will be scrutinized and could derail your approval.
For professional representation in listing or buying a home, please call Weintraub & Wallace Realtors, with RE/MAX Gold Real Estate at 916.233.6759.
In Gratitude,
Guild Mortgage NMS #3274 Equal Housing Lender
–Dan Tharp 916-257-1470
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